Mortgages and financing

Mortgage refinancing (refinancování)

In Czech: Refinancování hypotéky

Mortgage refinancing (refinancování) means paying off your existing mortgage with a new loan, usually from another bank on better terms. It is typically done when the fixed-rate period ends.

Also called: remortgage, remortgaging, refinancování

What it means

In refinancing (refinancování hypotéky) the borrower takes out a new loan and uses it to repay the existing mortgage. The new lender sends the money straight to the original bank, which closes the loan and releases its lien. The aim is usually a lower rate, better conditions or a different term.

Refinancing differs from refixation (refixace), where you stay with your current bank and only agree on a new rate for the next fixed period.

How it works in the Czech Republic

Under the Consumer Credit Act as worded in October 2026, the loan can be repaid without compensating costs, for example within 3 months of a new rate being notified or during a period when the rate is not fixed. Outside these situations the original bank may ask for compensation of reasonably incurred costs, which is capped for housing loans. A change to the Act is scheduled from 1 January 2027, so check the current wording.

The new bank assesses your creditworthiness (bonita) and asks for a property valuation. You ask the original bank for a statement of the outstanding balance and sign a new loan agreement and pledge agreement. The new bank's lien arises when it is entered in the land register (katastr nemovitostí); an application for entry (návrh na vklad) carries an administrative fee of CZK 2,000.

Once the old loan is repaid, the original bank issues a confirmation on the basis of which its lien is removed from the land register. Until then, two liens may be recorded on the title deed (list vlastnictví) at the same time.

Practical example

For example, a borrower has CZK 2,500,000 left on a mortgage and the fixed period ends in four months. The bank sends a new rate offer, but the borrower also gets offers from two other banks. One is cheaper even after fees, so the borrower moves the mortgage within the period after the new rate was notified.

What to watch out for

  • Start several months before the fixed period ends; approval and the land register entry take time.
  • Compare the RPSN of the new offer, and add the cost of the valuation and the land register entry.
  • Check how and when your current bank notifies the new rate, since the penalty-free period runs from that notice.
  • Make sure the new bank pays off the balance on the agreed day so no extra interest builds up.
  • Afterwards, check the title deed to confirm the old lien has been deleted.

Frequently asked questions

When does refinancing pay off?

When the new offer is cheaper after all fees, meaning its RPSN is lower for the same loan amount and fixed period. It depends on the specific offers.

Can I refinance in the middle of a fixed period?

Yes, a loan can be repaid at any time. The original bank may then ask for compensation of reasonably incurred costs, which the law caps for housing loans.

Will the new bank want a new valuation?

The new bank needs to set the collateral value, so it will usually ask for a valuation. Ask the bank directly who pays for it and how much it costs.

  • Mortgage rate fixation (fixace)Mortgage rate fixation (fixace) is the period during which the interest rate on a loan stays the same. When it ends, the bank offers a new rate and the borrower decides whether to stay, refinance or repay part.
  • Early mortgage repayment (předčasné splacení)Early mortgage repayment (předčasné splacení) means paying off all or part of a loan sooner than the repayment schedule says. The law allows it at any time, but the lender may claim reasonably incurred costs.
  • Lien (zástavní právo)A lien (zástavní právo) secures a debt: if the debtor does not pay, the creditor can be satisfied from the pledged property. On a property in the land register it arises by entry and stays with the property when it changes hands.
  • Property valuation (odhad nemovitosti)A property valuation (odhad nemovitosti) is an assessment of a flat, house or plot that a bank relies on when deciding on a mortgage. It is used to set the collateral value and thus how much the bank will lend.
  • RPSN (annual percentage rate of charge)RPSN (roční procentní sazba nákladů) is the Czech annual percentage rate of charge: the total cost of a consumer loan expressed as a yearly percentage of the loan amount, including fees, not just interest.

Sources

Laws and official pages this text is based on (in Czech).

This text is for information only and has not yet been checked by a legal or financial expert. It is not legal, tax or financial advice. Verify important details in the listed sources or with a professional.

Updated 25 October 2026

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